The Significance of Master Data Management

According to studies, corporations produce over 7.5 sextillion gigabytes of data each day across their global locations in hundreds of different onsite servers, local hard drives, and cloud storage. But the challenge for large companies is to manage this data and convert it into a format that delivers actual value. This includes improving data quality, reducing errors and inaccuracies, merging the duplicates, and enhancing the overall health of the data.

What is master data?

Master data refers to the non-transactional, consistent, and uniform data — identifiers and attributes — that defines the core entities of an enterprise. It drives business value and helps monitor different aspects of day-to-day operations and forecasts. A version of data with a definition that is agreed upon by all the stakeholders is its master version. A few examples of master data include:

∙Accounts, invoicing, billing, and payments

∙Inventory and other assets

∙Addresses and routing of different locations

∙Information of employees, vendors, customers, or any other stakeholders

∙Marketing and sales projections

Each of these examples may have further sub-categories. For example, customer data could include first name, last name, postal code, address, bank details, service-level agreements, and more. When a company is spread over multiple locations with different business verticals, it is extremely difficult to make sense of all the data. This is where master data management (MDM) steps in.

What is master data management?

The role of  master data management is to unify data from disparate systems and convert it into a ‘single version of the truth.’ Master data covers both business and technology realms and focuses on continuous data quality improvement.

Let us take a real-life example from a large corporation. A customer interacts with a corporation from different touchpoints. How would the corporation ensure that the customer’s details, such as a phone number, are the same across systems, including the CRM, marketing automation platforms, and support tickets? MDM systems ensure logical linkages among different functions of a corporation so that the data is uniform. Let us look at the need for MDM and its benefits in detail.

Why is MDM important?

MDM requires a paradigm shift in the way a corporation manages its data. It requires buy-in from all the departments. This table shows the extent of inconsistencies multiple systems can create for the same data record.

DepartmentOrganisationProductsContract dateID numberemailPhone
FinanceHudgens Real Estate Pvt. Ltd., BiminghamService Apartments – A5 to A911.07.87456 675 459[email protected]001 212-376-3487
ProcurementHudgens Real EstateHousing11-7-1987[email protected]
SupportHudgensProperty Provision7/11/87ID – 456675459[email protected]12123763487

All details mentioned here are arbitrary

This is a clear example of how painful it can be to manually integrate information from multiple systems. This leads to waste of time and customer dissatisfaction because executives often fail to find the right information on time.

An MDM software governs data from any system to merge the data and deliver powerful business benefits. Apart from day-to-day decision-making, an master data management solution can help in the following scenarios:

Mergers and acquisitions (M&A): Every corporation has its master data, which it needs to merge for uniformity. Corporations that are adept at M&A usually have an excellent MDM strategy.

Ownership: An MDM system defines clear ownership of the data, which is usually missing when the data is in fragments.

Processes: For effective data management, there needs to be a clear process. This includes addition, modification, or deletion. An MDM system has a clear process for these activities, which eliminates the chances of any errors or duplications.

System synchronisation: Without an MDM strategy, systems take too long to synchronise the data. An MDM system does reverse synchronisation of systems in real time.


MDM provides a data governance framework for an enterprise. Corporations that implement MDM reap its benefits with improved operational efficiency. It is necessary to invest in all aspects of MDM, such as identifying business goals, analysis of the consumer and business data, data governance, and MDM infrastructure. Implementing MDM is a shift in business operations resulting in a ‘single version of the truth’ of all data. This means that corporations have access to reliable data, which helps make quick and tactical business decisions.

Michael Caine

Michael Caine is the Owner of Amir Articles and also the founder of ANO Digital (Most Powerful Online Content Creator Company), from the USA, studied MBA in 2012, love to play games and write content in different categories.